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Judgment
The Court: Revenue has preferred this appeal against order
dated 19th June, 2012 passed by the Income Tax Appellate Tribunal
"B" Bench Kolkata, in ITA no.14106/KOL/2011 pertaining to the
assessment year 2005-06. By order dated 9th December, 2012 the
appeal was admitted on the following question:
"(a) Whether in the facts and in the circumstances of the case
the Learned Income Tax, Appellate Tribunal erred in law in
allowing the deduction under section 80GGB in respect of
donation made by the assessee to the political parties."
The facts relevant for the purpose of this appeal are that the
assessee made donation to political parties. In the return filed
by the assessee this was not claimed as a deduction. The
assessment was accordingly made. The assessee on preferring an
appeal, the CIT(A) found and said that which is reproduced
below:
"..........Examination of the breakup of expenses in schedule-3 of the
Audited Accounts as well as in Annexure-III with regard to
miscellaneous expenses reveal that the appellant made total
contribution as donation during the year at Rs.2,25,72,928/-
which includes Rs.834136/- as employees'' contributions. Out of
total donation of Rs.2,16,65,864/- (excluding employees''
contribution) made by the appellant, it has added back on its
own to the income disclosed in the return filed on 31.10.2005
and claimed deduction u/s 80G Chapter-VIA only for
Rs.45,82,932/- i.e. 50% of the contribution made by it to
Tsuanami Relief Fund. Therefore, the claim of the appellant
that the assessing officer has not allowed deduction of
political contribution u/s 80GGB of the IT Act, 1961 is found to
be factually incorrect. In fact, the appellant on its own
disallowed the contribution in the return of income and neither
claimed as a deduction under Chapter-VIA of the IT Act in its
return nor claimed by filing a revised return nor made a claim
before the A.O. during the course of assessment proceedings. In view of the above and respectfully following the decision of
the Hon''ble Supreme Court in the case of Goetze (India) Ltd. Vs.
CIT reported in 284 ITR 323, I am of the opinion that the
appellant is not entitled to get deduction u/s80GGB claimed at
this stage. Therefore this ground of the appeal is dismissed."
The assessee preferred an appeal before the Tribunal which
by the impugned order said as follows:
"7. We have considered the rival submissions. It is noticed
that the Hon''ble Supreme Court in the case of Goetze (India)
Ltd. (refer to supra) has held that the appellate authority
being the tribunal did have the powers to direct the Assessing
Officer to accept the claim of assessee, though the same has not
been made in the original return nor has been claimed in the
revised return. In the circumstances, respectfully following the
ratio laid down by the Hon''ble Supreme Court in the case of
Gotze (India) Ltd. (refer to supra), the Assessing Officer is
directed to grant the assessee''s claim of deduction u/s 80GGB of
the donations made by the assessee to political parties in
respect of Rs.45 lakhs given to Congress party and Rs.80 lakhs
given to BJP."
Ms. Das De relied on a decision of the Supreme Court in the
case of Jute Corporation of India Ltd. Vs. CIT reported in (1991) 187 ITR 688 (SC) to the portion in that judgment as
extracted below:
"The next question which arises for consideration now is as
to what order should be passed in the present circumstances. In
view of the findings recorded by us, ordinarily, we should
direct the High Court to call for the statement of case from the
Tribunal and thereupon decide the matter afresh, but this
procedure would be time consuming. Since we have already
discussed the correct position in law, we do not consider it
necessary to follow the usual procedure. Since the view taken by
the Income tax Appellate Tribunal is not sustainable in law, we
grant leave against the order of the Income tax Appellate
Tribunal under article 136 and set aside the same and remit the
matter to the Income tax Appellate Tribunal to consider the
merits of the deduction permitted by the Appellate Assistant
Commissioner. If the Tribunal thinks it necessary, it may remand
the matter to the Appellate Assistant Commissioner (now Deputy
Commissioner of Appeals) for rehearing. The appeal is,
accordingly, disposed of. There will be no order as to costs."
She also relied on another decision of the Supreme Court in
the case of the Additional Commissioner of Income Tax, Gujarat
vs. Gurjargravures Private Ltd . reported in (1978) 111 ITR 1 to
submit that in similar facts the Supreme Court held that it was
not competent for the Tribunal to hold that the Appellate Assistant Commissioner should have entertained the question of
relief for exemption under section 84 when no such relief had
been claimed before the I.T.O. She however then submitted that
in view of the later judgment of the said court in the case of
Goetze (India) Ltd. Vs.CIT reported in (2006) 284 ITR 326 (SC)
the question was covered against Revenue.
Mr. Murarka, in addition to Goetze (India) Ltd. (supra),
relied on another judgment of the Supreme Court in the case of
CIT Vs. Mahalaxmi Sugar Mills Co. Ltd. reported in (1986) 160
ITR 920 (SC) in which, inter alia, the following was said.
"In the second place, there is a duty cast on the Income
tax Officer to apply the relevant provisions of the Indian
Income tax Act for the purpose of determining the true figure of
the assessee''s taxable income and the consequential tax
liability. Merely because the assessee fails to claim the
benefit of a set-off, it cannot relieve the Income tax Officer
of his duty to apply section 24 in an appropriate case."
In Goetze (India) Ltd. (supra) the Supreme Court had before
it the question as to whether the assessee could make a claim
for deduction other than by filing a revised return. The
assessee had in that case sought to claim the deduction by way
of a letter to the Assessing Officer. The Supreme Court dismissed the Civil Appeal preferred by the assessee but said as
follows:
"4........However, we make it clear that the issue in this case
is limited to the power of the assessing authority and does not
impinge on the power of the Income tax Appellate Tribunal under
section 254 of the Income tax Act, 1961. There shall be no order
as to costs."
The similarity on facts between the case at hand and the
assessee in Goetze (India) Ltd. (supra) is that the respective
deductions were not claimed before the Assessing Officer. In
this case the CIT(A) dismissed the appeal of the assessee
following Goetze (India) Ltd. (supra) in which the Supreme Court
had declared that the issue was limited to the power of the
assessing authority and does not impinge on the power of the
Tribunal under section 254 of the Act. Hence, the CIT(A) held
in favour of the Revenue at that stage and the Tribunal
thereafter, in favour of the assessee.
In Jute Corporation of India Ltd.(supra) on similar facts
the Supreme Court remitted the matter to the Tribunal to
consider the merits of the deduction raised before and permitted
by the Appellate Assistant Commissioner. Though Ms. Das De
submitted, such direction meant that the deduction was not
allowed, we see the direction as being one to consider the
merits of the deduction and not the deductibility itself.
The facts in Gurjargravures Private Ltd.(supra) were that
the assessee therein had not claimed exemption under section 84
before the I.T.O and the assessment was completed accordingly.
The assessee then appealed to the Appellate Assistant
Commissioner and one of the grounds of appeal was that the I.T.O
had erred in not giving the assessee any benefit under section
84 of the Act. The Appellate Assistant Commissioner dismissed
the appeal on the ground that the question of error on the part
of the I.T.O did not arise as no claim for exemption had been
made before him. On further appeal the Tribunal took a different
view. On these facts the Tribunal referred the following
question to the Gujarat High Court.
"Whether on the facts and in the circumstances of the case
it was competent for the Tribunal to hold that the Appellate
Assistant Commissioner should have entertained the question of
relief u/s 84, and to direct the income tax officer to allow
necessary relief?"
The Supreme Court in answering the question raised before the
High Court said, inter alia, as follows:
".......We are not here called upon to consider a case where the
assessee failed to make a claim though there was evidence on
record to support it, or a case where a claim was made but no
evidence or insufficient evidence was adduced in support. In the
present case neither any claim was made before the income tax officer, nor was there any material on record supporting such a
claim. We therefore hold that on the facts of this case, the
question referred to the High Court should have been answered in
the negative."
There is no conflict between the Gurjargravures Private
Ltd. (supra) and Goetze (India) Ltd. (supra). In the former a
claim for exemption was for the first time put up before the
Appellate Assistant Commissioner who rejected the claim as not
made before the I.T.O. This rejection was set aside by the
Tribunal with direction upon the Appellate Assistant
Commissioner to entertain the question of relief under section
84, claimed by the assessee in that case. The Supreme Court
held that it was not competent for the Tribunal to have done so.
The distinction between the two authorities eliminating any
conflict is that in Gurjargravures Private Ltd. (supra) the
competence of the Tribunal to direct the Appellate Assistant
Commissioner to entertain a claim not made before the I.T.O was
found to be lacking. In Goetze (India) Ltd. (supra) the Supreme
Court held that the assessing Authority''s power was limited but
not that of the Tribunal in the context of dealing with a claim
of the assessee therein not put forward before the Assessing
Officer. In Gurjargravures Private Ltd. (supra) the Tribunal
itself did not consider to allow the claim for relief.
In view of the aforesaid we answer the question in the
negative and in favour of the assessee. The appeal is
accordingly dismissed.